Uber Reworks On App In California To Comply With Gig Economy Law

Uber Technologies Inc. made certain changes to its app in California, mainly in fares, as the state has embraced a new law, known as Assembly Bill 5, or AB5, targeting gig economy companies. The law, which came in to effect on January 1, is designed to regulate companies hiring large number of contract workers, requiring them to treat workers as employees.

The changes, which would help Californian drivers a way to earn more, are part of Uber's efforts to strengthen its lawsuit to show that drivers are independent workers. In late December, the ride-hailing company along with courier services provider Postmates Inc. had filed a lawsuit to block the new law, challenging its constitutionality.

In California, the company now switched to showing passengers estimated price range in the app instead of upfront pricing for those requesting non-pool rides. The changes are also made to the ability to schedule rides with favorite drivers as well as adjustments to a rewards program.

Further, the drivers will not be impacted for rejecting certain trips. Meanwhile, Uber has urged drivers not to refuse trips solely to avoid certain neighborhoods, as it may violate the company's policy as well as California law.

In December, the San Francisco-based company had announced certain changes due to the new state law, while it came into effect now.

Uber and Postmates along with two app-based drivers filed the lawsuit, arguing that it violates the U.S. Constitution. The bill is said to hurt the gig economy business model of technology platforms, such as Uber, Postmates, Lyft Inc, and DoorDash, which mainly use contract workers for ride-hailing or food delivery services.